MUMBAI (Reuters) - Debt-laden Reliance Communications has signed a deal to sell its wireless assets to Reliance Jio Infocomm, for a total value of nearly 240 billion rupees ($3.75 billion), two sources familiar with the matter told Reuters on Friday.

The two companies had announced late on Thursday that Reliance Communications, backed by businessman Anil Ambani, would sell all its spectrum, tower, fiber optic and other telecom infrastructure assets to Jio, which is owned by Reliance Industries and is controlled by Anil Ambani’s elder brother Mukesh Ambani, India’s richest person. They did not give the value of the deal.

The sale, if finalised, would mark a big step in Reliance Communication’s quest to cut down its debt, which had sent its shares to record lows and led creditors such as China Development Bank (CDB) to start insolvency proceedings over missed payments.

CDB said earlier on Friday it is in talks with Reliance Communications, or RCom as it is called.

RCom shares rose as much as 29.9 percent on Friday while Reliance Industries rose as much as 0.9 percent.

The sale would also mark the return of the telecom operations back into the fold of Reliance Industries, which forayed into telecoms in 2002, spearheaded by the elder Ambani, under the name of Reliance Infocomm Ltd.

A feud between the two brothers in 2005 led to the split of Reliance Industries, with Mukesh Ambani keeping the cash cow oil and gas business and Anil Ambani walking away with telecoms and power.

But Mukesh Ambani has re-entered the telecoms space with the launch of Jio in September 2016, upending the sector with cut-price data and free voice service and pushing RCom into a debt spiral.

RCom has said it is retreating from the consumer telecom space to focus on its enterprise business, and on Tuesday announced a new plan to slash its debt pile by 390 billion rupees ($6.09 billion) without any haircut by the banks, leaving it with only around 60 billion rupees in debt.

Morgan Stanley analysts said the deal would allow Jio to further expand into India’s telecom space, though it would also add to its debt.

“Acquisition of RCom’s telecom infrastructure should bring synergies and lower costs while raising clarity on growth capex. The deal could potentially raise balance sheet leverage by 10-12 percent near term,” Morgan Stanley wrote in a note on Friday.

Reliance Jio is India’s fastest growing telecoms company with a subscriber base of close to 140 million. Through the deal, Jio gets access to four bands of spectrum and 43,000 telecom towers and a countrywide fiber optic network.